Fresh from the High Court of Australia comes news that the trial against iiNet has been dismissed. The official statement from the High Court is now available online:

The High Court unanimously dismissed the appeal. The Court observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright in the appellants' films. Rather, the extent of iiNet's power to prevent its customers from infringing the appellants' copyright was limited to an indirect power to terminate its contractual relationship with its customers. Further, the Court held that the information contained in the AFACT notices, as and when they were served, did not provide iiNet with a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers' accounts. For these reasons, the Court held that it could not be inferred from iiNet's inactivity after receiving the AFACT notices that iiNet had authorised any act of infringement of copyright in the appellants' films by its customers.

For those interested in the gory details, the full judgment is also available online.

Clearly great news for iiNet, but good news for Australian Internet users because it has reinforced the line that media companies cannot simply do whatever they want without going through the appropriate processes.

Friend of the show Nic Suzor, a post-doctoral researcher and lecturer at the Queensland University of Technology School of Law has written a much more in-depth analysis, from which he's very kindly provided us with the following summary.

This morning the High Court of Australia unanimously ruled that iiNet did not authorise the infringement of copyright by its users.

The dubiously-named "Australian Federation Against Copyright Theft" (AFACT) sent iiNet notices alleging that its users were infringing the copyrights of its members by downloading and uploading movies using BitTorrent. AFACT then argued that iiNet had a responsibility to do something to prevent further infringements by its users. In a unanimous judgement, the High Court ruled that iiNet had no positive duty to disconnect users.

This is a strong, unanimous judgement that clearly limits the scope of authorisation liability and the responsibilities of intermediaries in Australia. The High Court rejected AFACTs attempt to extend the concept of copyright liability to those companies who play some role in providing access but otherwise do very little to encourage copyright infringement.

Importantly, the High Court found that the only thing iiNet could do to prevent infringement would be to terminate its users' ISP access completely - and that was a power that would go far beyond what would be reasonable. The High Court explained that an obligation to terminate would not be particularly effective (since infringers could get new ISPs) and would be risky and uncertain (since the allegations provided by AFACT are difficult to verify).

This is an important win for Australian ISPs. It puts ISPs in a much stronger position when dealing with copyright owners - the certainty it provides means that Australian ISPs are less likely to bow to pressure to introduce private notice & notice schemes or even three-strikes termination schemes (like the ones introduced in the US). Unfortunately, this means that the large copyright owners will now likely seek legislative change to make ISPs take a more active role in policing infringement, in a similar way to efforts to introduce three-strikes regimes in the UK and NZ.

The result was 5-0. But it shouldn't be described as unanimous as there are two sets of reasons. The majority (French CJ, Keifel & Crennan JJ) and the concurrence (Gummow and Hayne JJ).

It's only a 151 paragraph judgment (which is very short if you know anything about the High Court). The ratio of the majority is at [63] to [80].

Some of the highlights:

at [78]

The extent of iiNet's power was limited to an indirect power to prevent a customer's primary infringement of the appellants' films by terminating the contractual relationship between them. The information contained in the AFACT notices, as and when they were served, did not provide iiNet with a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers' accounts. For these reasons, iiNet's inactivity after receipt of the AFACT notices did not give rise to an inference of authorisation (by "countenancing" or otherwise) of any act of primary infringement by its customers

at [79]

This final conclusion shows that the concept and the principles of the statutory tort of authorisation of copyright infringement are not readily suited to enforcing the rights of copyright owners in respect of widespread infringements occasioned by peer-to-peer file sharing, as occurs with the BitTorrent system.

at [144]

The facts of this case are well removed from those which in Moorhouse led Jacobs J[160] to adopt what had been said on the subject of indifference by Bankes LJ in Ciryl [161]. The rhetorical question with reference to what had been said by Bankes LJ, which Whitford J posed in CBS Inc v Ames Records & Tapes Ltd [162], may be asked here:
"Is this again a case of the indifference of somebody who did not consider it his business to interfere, who had no desire to see another person's copyright infringed, but whose view was that copyright and infringement were matters in this case not for him, but for the owners of the copyright? It must be recalled that the most important matter to bear in mind is the circumstances established in evidence in each case."

that media companies cannot simply do whatever they want without going through the appropriate due processes.

The outcome was better than iiNet being liable, but unfortunately this will push the media companies to step up their lobbying harder than ever to get the laws changed in their favour. Given how much money and influence they have, they may have some success.

Expect to see several SOPA-like variations attempting to be pushed through over the coming years, each attempt with altered and more generic/vague wording that doesn't trigger as many alarm bells.

The concurrence seems to place heavy reliance on the fact that AFACT's investigations were incomplete, and their notices to iiNet did not particularise the investigations methodology/evidence and findings. There seems to be an opening for if the copyright owner was to notify a carrier of infringement that sufficiently dealt with these matters, then the carrier may be obliged to act.

Expect to see several SOPA-like variations attempting to be pushed through over the coming years, each attempt with altered and more generic/vague wording that doesn't trigger as many alarm bells.last edited by parabol at 10:51:38 20/Apr/12

Hehe, it's kinda like what the Creationists have been trying to do with the Kansas school board. Everytime they sneak something in, they get found out, so then they bring it back re-worded and around we go again.

I think they need to do what was proposed in NZ, they can issue the cease and desist notices via the ISPs to IP addresses but they have to pay a processing fee of like $20 everytime they want one forwarded on. Surely that has to stop the bulls*** from AFACT members etc just spamming ISPs with notices and actually putting some investigation into their notices.

Copyright lawyers wont stop and i think its just the beginning because now we have a new bill in the U.S. called CISPA and thats after them trying to get through SOPA, PIPA and ACTA ... all threats to the Internet as we know it.

The concurrence seems to place heavy reliance on the fact that AFACT's investigations were incomplete, and their notices to iiNet did not particularise the investigations methodology/evidence and findings. There seems to be an opening for if the copyright owner was to notify a carrier of infringement that sufficiently dealt with these matters, then the carrier may be obliged to act.

Wouldn't that just be cost prohibitive though? To spend the time and resources on actually verifying that an infringement has taken place beyond logging an IP address connected to the peer network of a torrent would surely cost more than it's worth.

It seems to me that going after the infringer individually is far too expensive which is why they have been trying to assign collective blame to a convenient target, or at least get them to do the work for them. I mean chasing someone for downloading an album worth $20 would surely have to be done on a tight budget!

Copyright lawyers wont stop and i think its just the beginning because now we have a new bill in the U.S. called CISPA and thats after them trying to get through SOPA, PIPA and ACTA ... all threats to the Internet as we know it. Control of information and lies is paramount to them.

The funny thing is, if any of those bills had gone through, it would have crippled the Internet and developed a side network that people would use instead. Already places are being shut down for hosting torrents and such, but people find other ways.

And of course, the people who place the bill into power will never be questioned as to why they did it. Also I was watching the SOPA debacle when it was in the lowest place for passing bills, and they had to call in "nerds" to help them understand what exactly the bill would do.

Wouldn't that just be cost prohibitive though? To spend the time and resources on actually verifying that an infringement has taken place beyond logging an IP address connected to the peer network of a torrent would surely cost more than it's worth.

It seems to me that going after the infringer individually is far too expensive which is why they have been trying to assign collective blame to a convenient target, or at least get them to do the work for them. I mean chasing someone for downloading an album worth $20 would surely have to be done on a tight budget!

I think that's right. Their time/money/efforts are best spent restructuring their delivery mediums and market strategy.

The funny thing is, if any of those bills had gone through, it would have crippled the Internet and developed a side network that people would use instead

The problem is there is software/hardware out there that can allow ISPs to do statistical analysis of a TCP/IP or UDP stream and fairly reliably guess what kind of traffic it is (encrypted torrents, SSL'd usenet, etc) without having to actually decrypt the data itself which is difficult/impossible in many situations.

All you need is a couple of vague laws sneaked in that require ISPs to monitor for "suspicious" activity like that and be required to warn/disconnect users and then you'll have a fair bit of trouble finding workarounds.

The Australian Federation Against Copyright Theft has used its latest court loss and the impending NBN rollout as a springboard to lobby for legislative reforms on copyright.

AFACT managing director Neil Gane used today's unanimous High Court of Australia judgment against the studios to seek law changes, citing the impending rollout of the National Broadband Network as a second reason to institute a crackdown.

The problem is there is software/hardware out there that can allow ISPs to do statistical analysis of a TCP/IP or UDP stream and fairly reliably guess what kind of traffic it is (encrypted torrents, SSL'd usenet, etc) without having to actually decrypt the data itself which is difficult/impossible in many situations.

All you need is a couple of vague laws sneaked in that require ISPs to monitor for "suspicious" activity like that and be required to warn/disconnect users and then you'll have a fair bit of trouble finding workarounds.

What about the services which use those though? e.g. I think that both WoW and ToR use bittorrent to update.